In early 2006, the ISO began a program to redesign and upgrade
the wholesale energy market across ISOs controlled grid,
known as the MRTU. The programs under the MRTU initiative are
designed to implement market improvements to assure grid
reliability, more efficient and cost-effective use of resources,
and to create technology upgrades that would strengthen the
entire ISO computer system. The redesigned California energy
market under the MRTU is expected to include the following new
features, among others, which are not part of the current ISO
real-time only market:



An integrated forward market for energy, ancillary services and
congestion management that operates on a day-ahead basis;

Local energy prices by price nodes (approximately 3,000 nodes in
total), also known as locational marginal pricing; and



New market rules and penalties to prevent gaming and illegal
manipulation of the market as well as modifications to certain
existing market rules.

The MRTU was scheduled for implementation on March 31, 2008
and has been delayed to the fall of 2008. No new implementation
date has been announced. Power will be scheduled on a nodal
basis, rather than the current zonal system, which will aid in
grid reliability and congestion management. Furthermore, the
MRTU will incorporate the CPUCs resource adequacy
requirements to ensure that there are adequate energy resources
in critical areas. The MRTU will not affect how costs are
recovered through rates. SCE continues to work with the ISO to
develop the MRTU.

Market Redesign Technical Upgrade

In early 2006, the ISO began a program to redesign and upgrade the wholesale energy market across ISOs controlled grid, known as the MRTU. The programs under the MRTU initiative are designed to implement market improvements to assure grid reliability, more efficient and cost-effective use of resources, and to create technology upgrades that would strengthen the entire ISO computer system. The redesigned California energy market under the MRTU is expected to include the following new features, among others, which are not part of the current ISO real-time only market:



An integrated forward market for energy, ancillary services and congestion management that operates on a day-ahead basis;

Local energy prices by price nodes (approximately 3,000 nodes in total), also known as locational marginal pricing; and



New market rules and penalties to prevent gaming and illegal manipulation of the market as well as modifications to certain existing market rules.

The MRTU was scheduled for implementation on March 31, 2008 and has been delayed to the fall of 2008. No new implementation date has been announced. Power will be scheduled on a nodal basis, rather than the current zonal system, which will aid in grid reliability and congestion management. Furthermore, the MRTU will incorporate the CPUCs resource adequacy requirements to ensure that there are adequate energy resources in critical areas. The MRTU will not affect how costs are recovered through rates. SCE continues to work with the ISO to develop the MRTU.

In early 2006, the ISO began a program to redesign and upgrade the wholesale energy market across
ISOs controlled grid, known as the MRTU. The programs under the MRTU initiative are designed to implement market improvements to assure grid reliability, more efficient and cost-effective use of resources, and to create technology upgrades
that would strengthen the entire ISO computer system. The redesigned California energy

Local energy prices by price nodes (approximately 3,000 nodes in total), also known as locational marginal pricing; and



New market rules and penalties to prevent gaming and illegal manipulation of the market as well as modifications to certain existing market rules.

The MRTU is scheduled for implementation on March 31, 2008. Power will be scheduled on a nodal basis, rather than the current zonal
system, which will aid in grid reliability and congestion management. Furthermore, the MRTU will incorporate the CPUCs resource adequacy requirements to ensure that there are adequate energy resources in critical areas. The MRTU will not
affect how costs are recovered through rates. SCE continues to work with the ISO to develop the MRTU.